· Industrial
production fell a sharp 0.7% last month after a little revised increase
of 0.2% during March. The decline was close to the largest since
September 2005 and it was more than double Consensus expectations for a
0.3% drop.
· Factory output fell a slightly sharper 0.8% after no change during March. Output has now fallen 1.8% since its peak in July of 2007 and the three month rate change was a negative 5.8% (AR).
· Production in the high tech sector
continued strong and rose 1.0% (24.5% y/y) while the three month rate of
change amounted to 23.5%. Production of computers & office equipment
rose a lesser 0.5% and three month growth totaled 9.8% (AR). Output of
communications equipment rose an even stronger 2.1%. The three month
rate of growth was 27.5%.
· The trend in output outside the high tech sector has been decidedly different and one of weakness. Less high tech, factory output fell 0.9% last month and three month output growth fell to -7.6% (AR). Output of motor vehicles & parts has been notably weak and fell 8.2% last month, at a -43.5% annual rate during the last three months. Furniture output also fell 0.7% last month and at a hard 10.2% rate during the last three. Electrical equipment fell 0.8% during April and at a 2.6% rate during the last three months. Machinery output also was quite weak and fell 1.7% and at a three month rate of -9.1%
·
In
the nondurables area the picture is little better. Output ticked down
0.1% last month and at a 3.3% rate during the last three. Though apparel
output rose 0.1% last month it followed sharp declines during the prior
three. Three month annual growth was -7.0%. Paper output has been
falling at an 8.9% rate during the last three months and chemical output
is off at a 3.4% rate.
· Capacity utilization fell sharply to 79.7% during April but utilization in the factory sector slipped even further to 77.5%, its lowest also since late 2004. Utilization rates in the durables industries outside of high tech were notably weak, exemplified by the machinery industry where utilization fell to 74.6% versus 81% nearly two years ago. Overall capacity grew 1.8% during the last year and 2.0% in the factory sector. Less high tech, factory capacity grew a lower 0.9% over the last year.
· Risk Management in Financial Institutions is today's speech by Fed Chairman Ben S. Bernanke and it is available here.